PLAY TIME TOYS.

SUPPLEMENT 1

(TO DO)

PRO FORMA INCOME STATEMENTS UNDER LEVEL PRODUCTION (1991)

1990

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

1991

Net sales

7,433

108

126

145

125

125

125

Cost goods sold

5,203

70

82

94

81

81

81

94

950 1,078 1,254 1,340

656 5,864

Gross profit

2,230

38

44

51

44

44

44

51

508

577

671

717

350 3,136

Operating expenses

1,860

196

196

196

196

196

196

196

196

196

196

196

196 2,352

Profit bef. taxes

370

-158

-152

-145

-152

-152

-152

-145

312

381

475

521

154

784

Income taxes

126

-54

-52

-49

-52

-52

-52

-49

106

129

161

177

53

266

Net profit

244

-105

-100

-96

-101

-101

-101

-96

206

251

313

344

102

517

Sales:
Cost of goods sold:
Operating expenses:
Income taxes:

145 1,458 1,655 1,925 2,057 1,006 9,000

from table C; it does not change from seasonal to level production

from page 5, bottom; 65.16% of sales; CGS under seasonal production (6,300) - Savings under level
production (435)= 5,865
from Exhibit 2, note b and page 5; same as for seasonal plus 100
from Exhibit 2, note c; 34% of profit before taxes

Credit under seasonal production

Credit under level production
Increase of credit
Cost of extra credit 0,9%/month

0
0
0

0
0
0

182

742 1,246 1,827 2,345 2,475 2,951 2,061 1,016

182
184

742
749

0
1,246
1,257

0
1,827
1,843

0
2,345
2,366

437
2,038
2,056

1,611
1,340
1,352

1,608
453
457

1,541
-525
-530

880

112
-768
-775

PLAY TIME TOYS. SUPPLEMENT 2 (TO DO)

PRO FORMA INVENTORY AND TAX ACCOUNTS UNDER LEVEL PRODUCTION (1991)

INVENTORY ACCOUNT
Jan
Feb Mar
Apr May Jun
Jul
Aug
530
948 1,355 1,750 2,157 2,565 2,972 3,367
489
489
489
489
489
489
489
489
70
82
94
81
81
81
94
950
948 1,355 1,750 2,157 2,565 2,972 3,367 2,906

Initial inventory
+ production
- CGS
Final inventory
Production:
CGS:
Final inventory:

Sep
Oct Nov Dec 1991
2,906 2,316 1,551
700
533
489
489
489
489 5,864
1,078 1,254 1,340
656 5,864
2,316 1,551
700
533
533

CGS for 1991 divided by 12 months (5864/12)

CGS for every month; 65,16% x monthly sales
Inventory at the end of the month

INCOME TAX ACCOUNT

Initial accrued taxes
+ taxes of this month
- tax payments
Final accrued taxes
Initial accrued taxes:
Taxes of this month:
Tax payments:

Jan
Feb Mar
80
26
-26
-54
-52
-49
0
0
80
26
-26 -155

Apr May Jun

-155 -238 -290
-52
-52
-52
31
0
32
-238 -290 -374

accrued taxes at the beginning of the month

from the income statement in Supplement 1
from Exhibit 1, note g

Jul
Aug Sep
-374 -423 -317
-49
106
129
0
0
31
-423 -317 -219

Oct Nov Dec 1991

-219
-57
120
161
177
53
266
0
0
32
206
-57
120
140

PLAY TIME TOYS. SUPPLEMENT 3 (TO DO)

PRO FORMA BALANCE SHEETS UNDER LEVEL PRODUCTION (1991)
ASSETS

1990

Cash (min. 175)

175

558

723

175

175

175

175

175

Acc. receivable

2628

958

234

271

270

250

250

270 1,603 3,113 3,580 3,982 3,063

Inventory

530

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug
175

Sep
175

Oct
175

948 1,355 1,750 2,157 2,565 2,972 3,367 2,906 2,316 1,551

Nov
175
700

Dec
175
533

Current assets

3,333 2,464 2,312 2,196 2,602 2,990 3,397 3,812 4,684 5,604 5,306 4,857 3,771

Fixed assets net

1070 1,070 1,070 1,070 1,070 1,070 1,070 1,070 1,070 1,070 1,070 1,070 1,070

Total assets

4,403 3,534 3,382 3,266 3,672 4,060 4,467 4,882 5,754 6,674 6,376 5,927 4,841

LIABILITIES & EQUITY

Acc. payable
225
225
225
225
225
Accrued taxes
80
26
-26 -155 -238
Credit line
680
0
0
109
742
Current long-t debt
50
50
50
50
50
Current liabilities
1,035
301
249
229
779
Long term debt
400
400
400
400
400
Equity
2938 2,833 2,733 2,637 2,536
Total Liab.&Equity
4,373 3,535 3,383 3,266 3,716
0
0
0
-43

225
-290
1,246
50
1,231
400
2,436
4,067
-7

225
-374
1,827
50
1,728
375
2,335
4,439
29

225
-423
2,345
50
2,197
375
2,239
4,811
71

225
-317
2,475
50
2,433
375
2,445
5,253
501

225
-219
2,951
50
3,007
375
2,696
6,079
596

225
-57
2,061
50
2,279
375
3,010
5,663
713

225
302
120
140
1,016
112
50
50
1,411
604
375
350
3,353 3,455
5,139 4,409
788
432

SHORT TERM FINANCIAL NEEDS

NFO (1)
3028 2213.2 2112.8 2125.8 2615.2 3054.5 3545.9 4009.9 4775.8
5598 5138.3 4511.9 3329.1
WC (2)
-2,298 -2,163 -2,063 -1,967 -1,823 -1,759 -1,669 -1,615 -2,251 -2,597 -3,027 -3,446 -3,167
CREDIT
(1) NFO = minimum cash (175) + acc. receivable + inventory - acc. payable - accr. taxes
(2) It includes current portion of long term debt because it has been already negotiated; we do not need to negotiate it again.
Negative credit means excess of cash; if it is positive, it indicates need of funds and coincides with the line of credit on the balance sheets.

Cash
Acc. receivable
Inventory
Fixed assets net

minimum 175
60 days; or sales of this month and previous month
following inventory account in supplement 2
constant figure

Acc. payable
Accrued taxes
Credit line
Current portion of
long term debt
Equity

purchases of this month = 30% x Annual Sales divided by 12 months

following tax account in supplement 2
we find out this figure to equilibrate assets and liabilities
part of the long term debt that matures this year; 50 in this case
stockholders equity of last month plus net income after taxes of this month

% s/ Sales

seasonal

100.0%
65.16%
34.8%
26.1%
8.7%
3.0%
5.7%

0.0328 3.282658

293

224

324.4444 0.888889
90
0.246575

From Income Statements

Exhibit 1, note g

270
30% Exh.1,e. 30% of sales or=purchases